VFIAX vs. VOO: Which Is the Better Vanguard 500 Fund?

Many investors wonder whether they should put their money into the Vanguard 500 Index Fund (VFIAX) or the Vanguard S&P 500 ETF (VOO).

Both are great options, but which one is right for you? This post will compare and contrast these two investments to help you decide.

It’s important to note that VFIAX and VOO are very similar. They track the S&P 500 Index. As a result, you can expect identical returns.

VFIAX vs VOO: Key differences

When it comes to VFIAX versus VOO, there are a few key differences to consider.

The main difference is that VFIAX is a mutual fund, while VOO is an exchange-traded fund (ETF). You can buy ETFs like VOO throughout the trading hours. Whereas, with a mutual fund like VFIAX, you must wait until after the market closes to execute your order.

Another difference is that VFIAX has a higher expense ratio than VOO (0.04% vs. 0.03%).

VFIAX also has a minimum investment requirement of $3,000, while there is no such requirement for VOO. You can buy a single share of the Vanguard S&P 500 ETF at its current price. This makes the Vanguard S&P 500 ETF more accessible to smaller investors.

What’s the Fidelity Equivalent of VFIAX and VOO?

I’m glad you asked.

As you may know, Fidelity will charge an additional fee when you purchase Vanguard funds through their platform.

To avoid this fee, you can buy the equivalent of either VFIAX or VOO on Fidelity.

Spoiler alert: it’s FXAIX!

Similar Fidelity funds will give you the same exposure to the S&P 500 index and identical annualized returns to the Vanguard funds.

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Hi! I'm Diego, 38, and I currently reside in New York. I work as a financial analyst. I primarily focus on initiatives involving research and data analysis.

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